THE RISE OF THE
COFFEE By Stacy Richter
T
he average price to buy a new car was $1510 in 1950. The price of an average home in the U.S. was $7400. Bread could be purchased for 18 cents per loaf and a gallon of milk for 83 cents. The average annul income in the U.S. was $33001.
What impact would you feel if that loaf of bread today went from $2.40 to $240,000 within 1 year and that gallon of milk now costs $350,000? That is what residents of Venezuela are experiencing with hyper inflation right now.
Fast forward to today…
Bloomberg2 created the Venezuelan Café Con Leche Index to demonstrate the effect of hyper inflation in Venezuela. It tracks the price of a hot cup of coffee served at a bakery in Caracas then and now. The index illustrates the currency problem in Venezuela and how a cup of coffee that cost 35.00 Bolivars in September 2018 is now priced to sell at 14,000 Bolivars. That’s the equivalent of your favourite dark roast now costing you about $1397.
…. The average price for a car is ~$36,000 … An average home will cost ~$454,000 … A loaf of bread costs ~$2.40 and $3.50 for a gallon of milk The average annual household income most people have to buy these necessities is ~$46,800. Inflation is a part of our modern lives and most do not notice the effects of any incremental changes from year to year.
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1) US Census Bureau. (2018, September 4). Income of Families and Persons in the United States: 1950. Retrieved from https://www. census.gov/library/publications/1952/demo/p60-009.html 2) Bloomberg. (2016, December 15). VENEZUELAN CAFÉ CON LECHE INDEX. Retrieved from https://www.bloomberg.com/ features/2016-venezuela-cafe-con-leche-index/
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